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Peace talks between Palestinian and Israeli officials are on the brink of collapse (File/AFP)

Frustrated by Israeli and Palestinian actions that have complicated his furious effort to salvage foundering peace talks, U.S. Secretary of State John Kerry on Thursday exhorted leaders on both sides to "lead" and to do so now to prevent the negotiations from collapsing.

In Algeria for strategic security talks after traveling to the Mideast twice in the past 10 days to rescue the peace process, Kerry said there are limits to what the Obama administration can do to push the parties together. He vowed to continue his efforts "no matter what."

But he also stressed he could not force Israeli Prime Minister Benjamin Netanyahu or Palestinian President Mahmoud Abbas to continue the talks, let alone actually resolve the long-running conflict.

"You can facilitate, you can push, you can nudge, but the parties themselves have to make fundamental decisions and compromises," he said. "The leaders have to lead and they have to be able to see a moment when it's there."

He recalled the old adage that you can lead a horse to water but can't make it drink.

"Now is the time to drink," Kerry said. "The leaders need to know that."

Later, Kerry told reporters he planned to talk with both Netanyahu and Abbas on Thursday afternoon.

Both actions run counter to the agreement the two sides reached last year to negotiate a settlement by the end of April.

Kerry said Thursday that progress had been made in resolving "some of the questions that have arisen as a result of the events of the past few days. But there is a still a gap and that gap will have to be closed in the next few days."

Despite eight months of talks, there have been few, if any, tangible signs of progress. Confronted with the deadlock, Kerry and his team have incrementally lowered the bar for success of the talks from a comprehensive peace deal to a framework for an agreement and are now trying merely to keep the two sides talking beyond the initial target date.

Kerry said both Netanyahu and Abbas have told him they remain committed to the process and noted that Israeli, Palestinian and U.S. negotiators met last night even in the face of the latest difficulties. He said negotiators "worked literally until 4 in the morning ... in an effort to try to move the process forward."

He said the current disagreements were over "process" rather than "the fundamental substance of a final status agreement."

If the two sides can't find a way to continue talking, Kerry said, "it would be a tragedy for both of them."